Tucked away in an anonymous office park near Coca-Cola’s global headquarters in Atlanta, the company is developing a wave of equipment and drinks designed for an era when a beverage is expected to do more than quench thirst. Its innovation labs have produced a Freestyle dispenser prototype capable of pouring dirty sodas, a Micro Matic system being tested with AMC Theatres for brightly colored refreshers, and a white-label energy drink that operators can tailor by color and flavor.
A shift toward handcrafted drinks
Restaurants have come to rely on handcrafted beverages such as refreshers and iced coffee to drive traffic and sales, even as diners broadly cut their spending. According to Circana data, beverage servings at restaurants in the second quarter of this year outpaced both food servings alone and food with beverages. David Portalatin, Circana senior vice president and food service industry advisor, said that for many consumers, especially Generation Z, a drink often represents something more than hydration. “Oftentimes these beverages are an opportunity to take a break, get some energy or protein, have a treat, at a lower price point,” he told CNBC.
That shift has not gone unnoticed by Coca-Cola’s restaurant partners. McDonald’s and Wendy’s have expanded their beverage menus, and Coke has had to move quickly to offer operators more convenient options or risk losing business to competitors. Megan Tallman, Coke’s vice president of dispensed equipment and innovation for its North American business, said unique beverage experiences are now an expectation rather than a bonus. “When you think about Gen Z, they are okay paying $10 for a drink that is craveable and that they can show on their Instagram or on TikTok, which is helping our customers drive margin and also beverage attachment,” she explained.
Freestyle turns 17
Coca-Cola’s Freestyle dispenser marked its 17th anniversary in July. Tallman said the machine is more relevant today than it was more than a decade ago, thanks to its dozens of flavors. But the competitive landscape has changed. Specialty beverage chains have exploded in number, with more than 100 such chains and more than 41,000 U.S. locations combined tracked by Technomic, selling everything from coffee to juice to boba.
Since the dispensers first began showing up in restaurants and movie theaters, they have poured more than 67 billion 8-ounce servings of beverages, with every pour tracked through real-time data collection. At Coke’s Equipment Innovation Center in Atlanta, a large television screen displays what those dispensers are currently pouring, where and at what time of day, down to the region and type of business. AHA sparkling water, for instance, is seeing an uptick in office buildings and hospitals.
Freestyle data has also helped Coke spot products worth launching in grocery stores, such as the limited-time Coca-Cola Orange Cream, which mixes soda with vanilla and orange syrup.
Automating dirty soda
The Freestyle line is expanding in other ways. The Freestyle Mini, introduced first in Europe, offers up to 16 drink options, more than double what a traditional soda gun provides, and is aimed at bars and restaurants with limited space. Coke showed the machine at the National Restaurant Association Show in Chicago this spring but has not yet sold it to U.S. customers.
To automate dirty soda, Coke has built a prototype that attaches a dairy module to the classic Freestyle dispenser. The trend, which Utah-based chain Swig says it invented, has spread widely, from KFC restaurants to grocery store shelves. It has also helped change soda’s image from a mass-market staple to a handcrafted treat.
Truist food, agribusiness and beverage analyst Matthew Greer said the shift reflects a generational mindset. “Gen Z is the first generation raised to believe that nothing you consume is neutral, so everything is either helping you or costing you,” he said. “So, traditional soda does nothing for me, and it gives me 40 grams of sugar, so that fails the test.”
Dirty sodas are a boon for Coke, whose sparkling soft drinks business, including Sprite, Schweppes and Fanta, still accounts for 69% of the company’s overall unit case volume. The company’s namesake soda alone made up 47% of global unit case volume and 42% of U.S. unit case volume in 2025, according to a company filing.
The prototype dirty soda dispenser uses a preprogrammed recipe that leaves little room for customization but keeps the messy ingredients out of sight. It took roughly three weeks to create and preserves the drip that runs down the side of the cup, a visual signature of the drink.
The refresher race
Separately, Coke is testing Micro Matic mixology dispensers designed to produce refreshers and iced coffee drinks. The refresher category was created by Starbucks in 2012 to attract non-coffee drinkers, especially in the afternoon when cafe traffic dipped. Customers can choose bases, flavors and caffeine levels, and the product now generates roughly $2 billion in annual sales for Starbucks.
Other chains, including Panera Bread and Dunkin’, have taken notice. Refreshers now appear on 8.1% of menus at national restaurant chains, according to Datassential. Starbucks CEO Brian Niccol acknowledged the trend on a late April earnings call, saying, “It’s almost, I think, a compliment, the fact that our Refresher business is being imitated in so many places.”
Coke is trying to define the category on its own terms. Sarah Kate Sims, director of dispensed innovation for Coca-Cola North America, described a refresher as a “healthier” pick-me-up that does not rely on a traditional coffee caffeine base, instead using green tea or a natural coffee extract. It also needs to look appealing. “So that’s what I’m working on for next year,” Sims said.
The Vault and white-label products
Coke’s equipment work is complemented by its product testing space, The Vault, located across the parking lot from its Global Equipment Platforms office. Caroline Zambataro, collaboration architect at Coke, said the company brings top customers there “to showcase our innovation and mixology, but also to collaborate and problem-solve and tackle the biggest challenges in the business.” One such customer is Whataburger, which worked with Coke for about 18 months on its Whatafreshers line, launched in July.
Some Coke innovations are nearly invisible to consumers. The company says it pioneered premium lemonade more than a decade ago with a white-label version now served through more than 40,000 bubbler dispensers, including at Wendy’s, where it is sold as Dave’s Craft Lemonade, named after founder Dave Thomas. Lemonade has since become a popular base for refreshers and other colorful drinks, as has Sprite, which ranked fifth among U.S. carbonated soft drink brands by 2025 sales volume, according to Beverage Digest.
A customizable energy drink
Coke is also developing a colorless, relatively unflavored energy drink available in frozen or liquid form, with plans to launch it with food service operators in the first half of 2027. Energy drinks are a much smaller category than sparkling beverages, but Tallman noted they have the highest expected growth projections for the next decade. “We believe this solution really meets many consumers because more female consumers are interested in energy if it’s a handcrafted solution,” she said.
Truist’s Greer said the energy drink conversation has widened since Celsius entered the market, expanding both audiences and occasions. Energy drinks are no longer just a gas station purchase, he said, but can be part of a workout routine. Coke’s version is designed to be served by employees to limit consumption; a 12-ounce serving contains 106 milligrams of caffeine, roughly what a same-size can of Red Bull has and half the caffeine content of a Celsius can. The category has drawn scrutiny after Panera Bread’s Charged Lemonade was cited in at least two wrongful death lawsuits.
Coke has seen growing interest from food service partners in customizable drinks, according to Melinda Pritchett, director of innovation for Coke’s North American business. “If you’re looking at what McDonald’s is doing with the handcrafted beverages, all of our customers are saying, ‘We should be in that as well,'” she said.
The McDonald’s question
McDonald’s, the largest U.S. restaurant chain by system sales, has become a bellwether for beverage strategy. In May, it expanded its McCafe menu to include refreshers and crafted sodas, including Coke’s Sprite and Hi-C. “In the U.S., [drink] sales are ahead of plan. Guest checks are higher, and we’re seeing new occasions emerge throughout the day,” McDonald’s CEO Chris Kempczinski said on an earnings call earlier in August. “We’ve also seen strong food attachment rates on these orders.”
The beverage push came during an otherwise sluggish quarter for McDonald’s U.S. business, which posted same-store sales growth of just 0.8%. The company has replaced its U.S. president in an effort to revive its domestic operations.
Last Monday, McDonald’s added the Red Bull Dragonberry Energizer to its menu. Red Bull is privately owned and has no connection to Coke. The decision to work with a rival rather than a Coke-affiliated energy brand like Monster has fueled speculation about the decades-long relationship between the two companies. Coke CEO Henrique Braun addressed the partnership on a late April earnings call, saying, “We have a fantastic and very long-standing partnership with McDonald’s, and that’s intact, right? We continue to be very happy with that partnership. … We do respect the decisions on other choices about their relationships with other companies.”
The real test, naturally, is whether the new drinks bring in additional sales. Coke tracks metrics such as incremental volume when testing a beverage with a food service partner, essentially asking whether a customer would buy a refresher even if they would not otherwise have bought a drink. A survey of several dozen U.S. McDonald’s franchisees by Kalinowski Equity Research found that more than half said the specialty drinks are meeting their expectations. “They are selling great, but most of it is a trade-off from other beverages,” one anonymous franchisee said. “Not many new transaction counts.”
Coca-Cola is betting that its equipment, data and new beverage formats will keep it indispensable to restaurants even as the definition of a drink continues to broaden.
